The new version of Microsoft Dynamics NAV just released in the fall of 2016 offers substantial potential to reduce process costs thanks to full Office 365 integration and embedded PowerBI. In an ever more connected world, an old system out of support does not improve systems integration (including Internet of things) or allows for better business processes – the new NAV version makes this argument easy to make.

Yet, we remain in a situation where more than 70% of NAV installations are out of mainstream support from Microsoft. Customers still think of upgrades as having a root canal and Dynamics partners assign a lower priority to moving existing customers to the latest version than they do to new customer projects.

The challenge for partners is that they have delivered the oldest piece of IT their customers have and they are relatively exposed to losing their business to faster moving competitors. So, normally this would call for a strategic action for partners seeking to protect their business, but many partners are still holding back. We wonder why!

Let’s review some common beliefs

Many partners believe that the upgrade process starts with a lengthy upfront gap-fit analysis . This is not necessarily the case unless you deliberately want to make your upgrade process future aligned from day one and as complex as an implementation – there is plenty of opportunity to either just take a step back towards standard NAV or move most of your modifications to the new versions without drowning in this process.

The above is further supported by the belief that the customizations are a problem or the version is too out of date – (Okay, if you run version 2.01 with little of the original functionality left, then you have a point). However, if the business processes are well thought out and the code is decent then you can actually push the upgrade a long way without too much customer or consultant involvement.

Another logical concern is about achieving an acceptable return on investment. With the latest version of NAV the benefits gained in terms of Office 365 integration, embedded PowerBI and other improvements mean that the ROI needs to be seen over almost all business processes and not just in finance. In fact, Microsoft estimates that the integration with Office 365 alone can save users up to 40% of their time as they no longer need to switch back and forth between applications. With savings like these, even the ROI argument has a challenge.

Then, once the user is convinced that an upgrade makes sense, we are met with the partner’s belief that it is cheaper to perform the upgrade in-house using idle time. Life is not that simple. They rarely have the idle time, their developers do not like performing upgrades, they do not have the standard tools that an experienced upgrade organization has and they often lack the experience. In fact, using a dedicated upgrade organization can often reduce the cost of the technical upgrade by more than 50%.

Keep it simple and do it fast

Most upgrade organizations will have their own version of standard upgrades as listed below.

Upgrade type

Simple

Standard

Enhanced

Description

Data driven process focused on using standard NAV.

Moves current functionality and data to new NAV version.

Re-aligns business processes with best practice in new NAV.

Migration of data

All relevant history

All relevant history

All relevant history

Merge of functionality

Close to none

Close to all

Depends on user

Customer effort

Low, need to learn processes in new NAV

Moderate, need to learn and adjust to new NAV

High, need to define new processes based on new NAV

Consulting effort

Low

Moderate

High

Development effort

Low

Moderate to high

High

Time scale

Short – days

Moderate – weeks

High – months

Project cost

Low

Moderate

Can be high

The interesting part is that the choice of how to perform the upgrade depends more on the complexity of your business than on your current version and modifications. As a result, there is more than one approach to upgrades.

If you are dealing with the upgrade of a trading business, you might be surprised at the expansion of functionality in NAV since you did the implementation and decide on more standard functionality. If you are dealing with a more complex business, you may want to move as much as possible to the new version and then perform the re-alignment of business processes afterwards. It is only when you run a larger vertical solution that has been modified heavily that you need to analyze in detail up-front how you want to modify your processes.

What is even more interesting is that in a simple and standard process, you rarely have a need to run parallel bookkeeping – the system can be set-up with modifications and data, enabling the user and the partner to test as long as required. After their acceptance, it can be taken live on a weekend.

Is it the last big upgrade?

Some partners push the next upgrade as the last big upgrade. True, a thought-through alignment of business processes combined with code that has been re-written to current standards can do a lot to future-proof your installation. Also, there are cases where the simple process is not the best way forward.

However, the reality is that with the improvements in NAV as well as the tools and experience in the market, a fair share of the last big upgrades may have already been done. The upgrade they are about to do can be relatively painless and cost efficient in comparison to the last one and cheaper than they think if they chose the upgrade type suitable for them. What is more, this time around the gains can be larger.

So, based on the above, can anybody help me understand why so many Dynamics partners let so many of their customers run NAV installations that are more than 10 years old?

Why is it not a strategic action for partners to upgrade their customers?